Cotton Candy Cocoons are made of a pink substance like cotton candy or silk. Thing is, it's harder than that. On the outside, you can peel all of the substance off. But on the inside, it contains the look and feel of a spider web. Mike actually tore open one spot of the cocoon which showed a dissolving bloody face. This means that the victims inside the cocoons dissolved from the lethal contents while mixed with candy sugar.
The Klowns will use Krazy Straws to suck out the blood of humans. As seen in the movie, Chubby demonstrates the process.